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Investor Presentation June 2011

Investor Presentation June 2011. Forward-Looking Statements.

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Investor Presentation June 2011

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  1. Investor Presentation June 2011

  2. Forward-Looking Statements Certain statements in this document are “forward-looking statements”, which reflect management’s current beliefs and expectations regarding the Fund and The DATA Group’s future growth, results of operations, performance, and business prospects and opportunities. Forward-looking statements involve risks and uncertainties related to factors that could cause actual results to differ materially from anticipated results, including those factors discussed in the Fund’s periodic filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this document. Unless required by applicable securities law, the Fund does not intend and does not assume any obligation to update these forward-looking statements. 2

  3. Overview Industry-leading market position with strong customer base Diversified product & service offering in traditional products and new technology / delivery Long history as a cash generator – monthly unitholder distributions Reasonable capex requirements, disciplined investment process Focused, multi-part growth strategy 3

  4. Corporate Profile Founded in 1959 32 locations across Canada Customers include many of Canada’s largest companies TSX: DGI.UN / DGI.DB.A Market Cap: ~ $150 M equity / ~$45 M debentures DGI.UN annualized distribution: $0.65 / unit 2010 Revenue / EBITDA: $332 M / $30.8 M 4

  5. Customer Value Proposition Reduce costs and increase revenue • Constructive, problem-solving approach • Broad range of capabilities • Use of technology Minimize risk • Financial strength • Scale of operations • Focus on operational risk reduction for “mission critical” documents State-of-the-Art Manufacturing, Warehousing and Distribution 5

  6. Solid Customer Base Large, blue-chip customers Majority of top 25 > 10 year relationships No single customer > 5% of revenue 6

  7. Industry Overview Canadian Printing Industry Business Documents* Packaging Magazines Financial Printing* Newspapers Marketing & Promotion* Book Publishing Event Tickets* Newspaper Inserts Labels* Greeting Cards Stationery* Strong growth in outsourcing and direct marketing *Segments in which Data Group operates 7

  8. Key Markets Served Direct Marketing Outsourced Document Management 8

  9. DATA Group Services Agreement DATA creates a database of all customer documents and establishes standard operating procedures Customer engages DATA in a multi-year agreement for document management services DATA commences reporting procedures on process improvement recommendations and key success factors DATA electronically stores the documents and enables customer to place orders via e-commerce system 9

  10. Customer Case Study DATA meets customer to assess document requirements (quantity, design, timing, distribution, budget) DATA implements “Economic Order Quantity” analysis DATA designs document Production: paper or electronic Client branch managers place orders via DATA’s e-commerce site, and DATA fulfills order / ships documents DATA advises client when the items need to be replenished DATA stores documents in warehouse or electronically 10

  11. Products 11

  12. Services DATA e-Commerce site DATA electronic order form DATA warehouse 12

  13. Competitive Advantages Cost-effective, single source solutions provider Scale: • Range of products • National presence • Invest in R & D / product innovation Long-term relationships, trusted partner and customer insight Experienced management team Financial strength 13

  14. Financial Review

  15. 5 Year Financial Review (C$ Millions) Cash Available For Distribution (CAFD) Revenue Adjusted EBITDA 15

  16. Q1 2011 Financial Review 16

  17. Q1 2011 Distributable Cash 17

  18. Balance sheet 18

  19. Growth Strategy

  20. Industry Dynamics Growth in web, electronic and wireless (mobile device) applications Decline in traditional, printed forms business Increasing complexity: what is the right product, delivery and technology? • Opportunity for trusted, consultative, single source provider • Opportunity for integration with customer business processes & systems Importance of proximity to customers • Negligible threat of offshore competition 20

  21. Growth Strategy 1 Aggressive sales efforts in core markets • New VP Sales, DATA East • New VP Sales, Ontario • New managers / re-org of reporting structure / sales compensation • New sales training • New web site / enhanced e-commerce site • Direct marketing campaigns • Enhanced sales information systems 21

  22. Growth Strategy 2 New products & services • Enhanced expertise: • New CIO • New VP, Digital & Direct Marketing • New Director, Product Research • New products: • Photobooks: web-to-print, utilizing existing assets, double-digit growth category • Multi-channel direct marketing: e-mail, mobile messaging, promotional web pages, data analytics, leverages existing direct mail business • New equipment: • Short-run, personalized marketing print and gift / loyalty cards 22

  23. Customer joins the Shoe Mart Loyalty Rewards Club after receiving a direct mail offer She responds by visiting a personalized Shoe Mart web site, and shops online Multi-Channel Direct Marketing 1 3 She receives regular print, email and mobile messages with special offers tailored to her 2 4 She visits retail store and redeems her special She receives a “Thank you” postcard with special Gift Card attached DATA tracks her responses to determine which direct marketing offers work best 5 6 23

  24. Growth Strategy 3 Incremental cost savings • Review internal processes & IT systems • New supply chain and procurement professionals • Real estate Acquisitions • Consistent with plans for new product development • Accretive 4 24

  25. Investment Highlights Industry-leading market position with strong customer base Diversified product & service offering in traditional products and new technology / delivery Long history as a cash generator – monthly unitholder distributions Reasonable capex requirements, disciplined investment process Financial strength Experienced management team Focused, multi-part growth strategy 25

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